In a move long fought for by campaigners and revealed by The Sun yesterday, around three million working households will see cash gains from the Universal Credit U-turn.

It is being done by lowering the all-encompassing new benefit’s taper from 65 per cent to 63 per cent, meaning claimants will be able to keep 2p more in every pound they earn.

Treasury officials say a couple with two children where one parent earns £30,000 a year would benefit by £425, and a single parent with one child and no housing costs earning £15,000 a year will get £170 back.

The announcements form part of a statement expected to be dominated by the costs of Brexit, with reports suggesting that the hit to public coffers from withdrawal from the EU could reach £100 billion over five years.

The budget is the first since Theresa May became Prime Minister after the Brexit vote

Last night Mr Hammond got an eve-of-statement boost as official figures showed the Government had borrowed a less-than-expected £4.8 billion last month.

But he has little room for manoeuvre in his efforts to help those families who are “just about managing” – known in Whitehall as the “Jams” – who Prime Minister Theresa May has identified as her main priority for support.

The Treasury said Mr Hammond’s package was designed to “improve the living standards of ordinary working class people and their families”, in line with the ambitions set out by Mrs May in her keynote speech to the Conservative conference last month.

The budget is likely to be dominated by Brexit – backed by new Foreign Secretary Boris Johnson

But the Universal Credit reform is unlikely to appease critics who have been calling on the Government to reverse changes introduced by the Chancellor’s predecessor George Osborne, which will drastically reduce the amount workers can earn before losing benefits.

Mr Osborne cut the “work allowance” threshold at which Universal Credit begins to be withdrawn from £222 per month for a couple with children and £263 for a single parent to £192, as part of a package designed to save £3 billion in welfare payments.

Income tax threshold is still set to rise to £12,500

Key points from the Autumn Statement

Here are the Chancellor's proposed changes

National Living Wage increase
National Living Wage rises by 30p an hour giving £500 more a year to lowest paid Brits

Now Mr Hammond is easing the pain by reducing the rate at which benefits are withdrawn from 65 per cent to 63 per cent, meaning that workers will lose 63p, rather than 65p, of their welfare for every pound they earn above their work allowance.

The Chancellor is expected to say that providing economic stability, restoring the public finances and boosting productivity are the single best methods to improve living standards, which last year grew at their fastest rate in 14 years.

Chancellor Philip Hammond raises Living Wage by 30p per hour

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